Question

At December 31, the unadjusted trial balance of H&R Tacks reports Interest Payable of $0 and Interest Expense of $0. Interest incurred and owed in December totals $580. Required: 1. Prepare the adjusting journal entry on December 31. 2. Prepare the T-accounts for each account, enter the unadjusted balances, post the adjusting journal entry, and report the adjusted balance. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the adjusting journal entry on December 31. (If no entry is required for a transaction/event, select "No Journal Ent Required" in the first account field.) View transaction list View journal entry worksheet No Date General Journal Debit Credit December 31 580 Interest Expense Interest Payable 580 < Required 1 Required 2 >
Do i put AJE beside any of these? when would i use this?

Answer 1

Ans:

AJE stands for Adjusting Journal Entry

Requirement [a]
Date	General Journal	Debit	Credit
Dec-31	Interest Expense	$ 580
	Interest payable		$ 580
	(to record interest accrued)
Requirement [b]
Interest Payable
Beg Bal		$ 0
		$ 580	31 Dec Adj Interest Expense
End bal		$ 580
Interest Expense
Beg Bal	$ 0
31 Dec Adj Interest payable	$ 580
End bal	$ 580

Requirement [b]
Interest Payable
Beg Bal		$ 0
		$ 580
End bal		$ 580	ADJ
Interest Expense
Beg Bal	$ 0
31 Dec Adj Interest payable	$ 580		ADJ
End bal	$ 580